Financial statements of Rukavina Corporation follow: Rukavina Corporation Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $26 $23 Accounts receivable 81 74 Inventory 39 33 Property, plant, and equipment 558 500 Less: accumulated depreciation 330 301 Total assets $374 $329 Liabilities and stockholders' equity: Accounts payable $44 $56 Bonds payable 105 130 Common stock 81 74 Retained earnings 144 69 Total liabilities and stockholders' equity $374 $329 Income Statement Sales $715 Cost of goods sold 454 Gross margin 261 Selling and administrative expenses 125 Net operating income 136 Income taxes 48 Net income $88 Cash dividends were $13. The company did not dispose of any property, plant, and equipment. It did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) investing activities for the year was:
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Financial statements of Rukavina Corporation follow:
Rukavina Corporation
Comparative
Ending Balance Beginning Balance
Assets:
Cash and cash equivalents $26 $23
Inventory 39 33
Property, plant, and equipment 558 500
Less:
Total assets $374 $329
Liabilities and
Accounts payable $44 $56
Bonds payable 105 130
Common stock 81 74
Total liabilities and stockholders' equity $374 $329
Income Statement
Sales $715
Cost of goods sold 454
Gross margin 261
Selling and administrative expenses 125
Net operating income 136
Income taxes 48
Net income $88
Cash dividends were $13. The company did not dispose of any property, plant, and equipment. It did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of
The net cash provided by (used in) investing activities for the year was:
a. $(13)
b. $7
c. $(25)
d. $(58)
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